Time to talk
Bob Hunt is chief executive of Paradigm Mortgage Services
There is always a lot of talk in our sector – with good reason – about the opportunities for advisers to diversify their propositions.
We know full well that mainstream vanilla mortgages are always likely to make up the bulk of activity but growing demand, and a growing appetite amongst lenders to be active in the more niche areas of our marketplace, means advisory practices do have the chance to spread their wings, so to speak.
A significant part of our proposition is the ability to support advisers in order to access these opportunities, and perhaps one of the key growth areas for all to consider now and in the future, is the demand for later life advice and the greater array of product options now available.
Of course, we must all be quick to recognise that moving into this space is not straightforward. For example, mortgage advisers can access RIO products and those mainstream mortgages from lenders who now lend to clients well into their 80s, but they may not have the authorisations, PI permissions or qualifications to be able to move into lifetime mortgages.
That can be a tricky situation for all concerned, because I’m sure most advisers would want to be able to offer their clients access to all the potential product solutions not just those which lie on the side of the fence they happen to currently be on.
Of course, one of the most fully-rounded approaches to take here for mainstream mortgage advisers is to grasp the later life lending nettle, get qualified/authorised and offer the full range of products and solutions, including equity release.
After all, and this is not to be underestimated, there is a distinct advantage to be accessed here because in all likelihood you will sit above those who have tended to dominate in the later life space – notably equity release specialists and IFAs who are less likely to offer mainstream solutions.
And, as we’ve outlined, there are now far more mainstream product solutions for those in later life than ever before, as lenders recognise the demand from older borrowers and move to deliver a proposition, particularly for those who do not want to go down the authorised equity release route.
Let’s be fair, despite the excellent work that has been done in busting a lot of the myths that still persist with equity release, there are always going to be a significant number of individuals for whom these products are either not suitable or they simply don’t want this solution.
For advisory firms which can offer the full array of products, they will be able to provide a solution in these circumstances that fits more within the mainstream space, and undoubtedly this will be a huge bonus as more and more people borrow into later life.
That said, it’s important for Paradigm to ensure advisers who don’t wish to secure qualification/authorisation/PI cover for equity release activities, still have options for those clients for whom these products may still be suitable.
We recently partnered with HUB Financial Services – an equity release specialist – to offer just this with our member firms now able to introduce clients for whom they have potentially identified such a need.
Overall however if firms can cover off all later life areas (including equity release) then they are likely to be placing themselves in a very strong area.
There’s no doubting in mind, that a culmination of factors including poor pension provision, a need to potentially fund care needs, more support required for family members, etcetera, will mean greater use of the home as an asset in later life.
It therefore makes sense for trusted advisers to be the one to deliver the right advice to those clients who need these solutions – whether mainstream mortgage, RIO or more specialised equity release.